This Court dismissed Campaniello's first three counterclaims
and granted summary judgment in favor of Gidatex on the fourth.
Gidatex's claims were tried to a jury from August 23 to August
31, 1999; the jury found Campaniello liable on all three claims.
The jury then awarded Gidatex $25,000 of Campaniello's profits
for the federal claims and $25,000 of Campaniello's profits for
the state claims, but did not award any actual damages. Following
the trial, this Court rejected Campaniello's equitable defenses
of unclean hands, laches and acquiescence and permanently
enjoined Campaniello from using the Saporiti mark, except in
limited circumstances.

Campaniello now moves, pursuant to Fed.R.Civ.P. 50(b), for
judgment as a matter of law, asserting that the jury had no
evidentiary basis for awarding Campaniello's profits to Gidatex.
Alternatively, Campaniello seeks to limit the jury's award by
arguing that the award constituted an impermissible double
recovery. Gidatex, for its part, seeks an enhancement of the
jury's award of Campaniello's profits, as well as attorneys'
fees, costs and prejudgmentg interest.

I. BACKGROUND

A. Facts

The background of this case has been detailed in several
opinions previously issued by this Court.*fn1 I review only the
facts relevant to the motions at issue.

From 1974 to 1994, Campaniello acted as the exclusive sales
representative for Saporiti. See Gidatex VI, 1999 WL 796181, at
*1. In March 1994, Campaniello sued Saporiti for breach of
contract, fraud, and misrepresentation. See id. During that
litigation, Saporiti filed for the Italian equivalent of
bankruptcy; under the supervision of an Italian bankruptcy court,
Gidatex leased Saporiti's assets with the option to purchase them
at a later date. See id.

In April 1995, Gidatex verbally terminated its relationship
with Campaniello. See id. At the time of the termination,
Campaniello had approximately $1,000,000 worth of Saporiti
furniture in its warehouses and showrooms. See id. Gidatex
refused to buy back the furniture but allowed Campaniello to sell
its remaining stock to the public. See id.

Despite the termination of the agreement, Campaniello continued
to use the Saporiti trademark. See id. Eight months after
Gidatex's oral termination of the agreement, in December 1995,
Gidatex's counsel advised Campaniello's counsel that Campaniello
was permitted to use the Saporiti trademark only in connection
with the sale of the remaining Saporiti inventory. See id.
Twenty-two months later, in October 1997, Gidatex's counsel sent
Campaniello's counsel a "cease and desist" letter. See id. at
*3. Campaniello replied that it had "`no intention of removing
the name Saporiti Italia from our wholesale showrooms. . . .'"
See id. (quoting October 21, 1997 Letter of Thomas Campaniello
to Thomas G. Bailey, Jr., Esq.). Gidatex then sent undercover
investigators into Campaniello's New York showroom to determine
whether Campaniello was using the Saporiti Italia trademark to
"pass off" other brands of furniture similar in style to
authentic Saporiti merchandise. See id.

At trial, Thomas Campaniello testified that after the
termination of the distributorship agreement in April 1995, no
one from Gidatex gave Campaniello permission to use the Saporiti
signs or trademark. See id. Campaniello remembered that his
lawyer had given him a copy of the December 1995 letter from
Gidatex's counsel. See id. Although Campaniello understood that
the letter requested that he take down the Saporiti sign, he
disregarded the letter because he considered it "incidental."
See id. Campaniello also recalled seeing the October 1997 cease
and desist letter and taking this second warning more
"seriously." See id. Campaniello agreed with plaintiff's
counsel that the two letters "left no doubt" in his mind that
Gidatex did not approve of Campaniello's use of the Saporiti sign
and trademark. See id.

Nevertheless, Saporiti signs remained on the storefront of
Campaniello showrooms in New York, Dallas and Miami and Dania,
Florida where Saporiti stock continued to be sold. See id. at
*4. Campaniello also continued to use the Saporiti name on
delivery trucks and in telephone and building directories. See
id.

B. Procedural History

On December 29, 1997, Gidatex sued Campaniello, alleging
violations of the Lanham Act, 15 U.S.C. § 1114(1) and 1125(a),
common law trademark infringement, and common law unfair
competition. On March 18, 1998, Campaniello asserted
counterclaims for breach of contract, unfair competition,
misappropriation, and unjust enrichment.*fn2

Before trial, Campaniello asserted the equitable defenses of
unclean hands, laches and acquiescence. See Gidatex VI, 1999 WL
796181, at *1. The Court bifurcated the equitable and legal
claims, and the latter were tried to a jury from August 23 to
August 31, 1999. See id. On Gidatex's federal claims, the jury
found that the Saporiti trademark was "arbitrary" and that
Campaniello had infringed the mark; it also found that
Campaniello had "engaged in conduct which is likely to confuse or
mislead numerous ordinarily prudent purchasers." See Court
Exhibit 3 (Verdict Sheet), at Questions 1-3. As for damages, the
jury answered "yes" to both parts of the following question:

Has Gidatex proven by a preponderance of the evidence
that Campaniello acted in bad faith by either:

(a) intending to capitalize off the reputation of
Saporiti Italia by diverting potential sales of
Saporiti Italia furniture caused by Campaniello's
sales of Il Loft brand furniture between April 1995
and the present?

OR (b) intentionally setting out to deceive the
public?

See id., at Question 5. The jury then stated that it did not
need an accounting and awarded Gidatex $25,000 of Campaniello's
profits. See id., at Question 6. Finally, the jury found that
Gidatex had suffered damages as a result of actual consumer
confusion caused by Campaniello's actions, but awarded Gidatex no
actual damages stemming from either injury to the reputation of
Saporiti or expenses incurred by Gidatex in an effort to prevent
customers from being confused. See id., at Questions 7, 10.

On Gidatex's state claim, the jury found that Campaniello had
engaged in unfair competition. See id., at Question 4. The jury
then found that Campaniello had acted in bad faith, answering a
question with the identical wording as Question 5. See id., at
Question 12. Again, the jury stated that it did not need an
accounting and awarded Gidatex $25,000 of Campaniello's profits.
See id., at Question 13. Finally, as with the federal claim,
the jury awarded no actual damages to Gidatex on the state claim.
See id., at Question 14.

After the jury delivered its verdict, the parties discussed
with the Court*fn3 whether the jury had made two separate
$25,000 awards. See Trial Transcript ("Trial Tr.") at 989-97.
In response, the Court asked the jury: "Are you making one
$25,000 damages award or are you making two separate $25,000
damages awards?" Id. at 997. After deliberating further, the
jury responded, in writing: "We the jury make two awards of
$25,000 each." Court Exhibit 4.

On October 6, 1999, this Court found that defendants had failed
to meet their burden of proof on the equitable defenses of
unclean hands, laches and acquiescence. See Gidatex VI, 1999 WL
796181, at *4-*9. The Court then permanently enjoined Campaniello
from using the Saporiti mark, except in connection with its sale
of the remaining Saporiti inventory and subject to stringent
conditions. See id. at *10.

1. Whether the jury had a sufficient evidentiary basis to award
any profits

Campaniello moves for judgment as a matter of law, pursuant to
Rule 50(b), arguing that the jury lacked a sufficient evidentiary
basis to award any of Campaniello's profits to Gidatex. ...

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